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# Feast Corporation currently makes the rolls that it uses for its sandw.docx

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# Feast Corporation currently makes the rolls that it uses for its sandw.docx

Feast Corporation currently makes the rolls that it uses for its sandwiches, It uses 50,000 rolls annually. The costs to make the rolls are given below:
Material= 0.04 per roll
Labor = 0.03 per roll
Variable overhead = 0.02 per roll
Fixed overhead = 0.07 per roll
A potentail supplier has offered to sell Feast the rolls for 0.11 each. If the rolls are pruchased, 20% of the fixed overheas could be avoided. If Feast accepts the offer it will be?
Solution
Material per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.04 Labour per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.03 Variable Overhead per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.02 Variable cost per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.09 Rolls required annually Â Â Â Â Â Â Â Â Â Â  50,000.00 Total Variable Cost(50,000*.09) Â Â Â Â Â Â Â Â Â Â Â Â Â  4,500.00 Fixed Costs per unitÂ Â  Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.07 Total Fixed Costs(50,000*.07) Â Â Â Â Â Â Â Â Â Â Â Â Â  3,500.00 Total Costs of producing(Fixed Costs +Variable Costs) Â Â Â Â Â Â Â Â Â Â Â Â Â  8,000.00 Purchase cost per rollÂ Â  Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.11 Rolls required annually Â Â Â Â Â Â Â Â Â Â  50,000.00 Total Purchase cost(50,000*.11) Â Â Â Â Â Â Â Â Â Â Â Â Â  5,500.00 Fixed Costs (3,500*80%) as 20% can be avoided Â Â Â Â Â Â Â Â Â Â Â Â Â  2,800.00 Total Costs of purchasing (Fixed Costs + Purchase costs) Â Â Â Â Â Â Â Â Â Â Â Â Â  8,300.00 No feasts offer should not be accepted as cost of producing is \$8,000 and cost of purchasing is \$8,300
.

Feast Corporation currently makes the rolls that it uses for its sandwiches, It uses 50,000 rolls annually. The costs to make the rolls are given below:
Material= 0.04 per roll
Labor = 0.03 per roll
Variable overhead = 0.02 per roll
Fixed overhead = 0.07 per roll
A potentail supplier has offered to sell Feast the rolls for 0.11 each. If the rolls are pruchased, 20% of the fixed overheas could be avoided. If Feast accepts the offer it will be?
Solution
Material per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.04 Labour per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.03 Variable Overhead per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.02 Variable cost per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.09 Rolls required annually Â Â Â Â Â Â Â Â Â Â  50,000.00 Total Variable Cost(50,000*.09) Â Â Â Â Â Â Â Â Â Â Â Â Â  4,500.00 Fixed Costs per unitÂ Â  Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.07 Total Fixed Costs(50,000*.07) Â Â Â Â Â Â Â Â Â Â Â Â Â  3,500.00 Total Costs of producing(Fixed Costs +Variable Costs) Â Â Â Â Â Â Â Â Â Â Â Â Â  8,000.00 Purchase cost per rollÂ Â  Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  0.11 Rolls required annually Â Â Â Â Â Â Â Â Â Â  50,000.00 Total Purchase cost(50,000*.11) Â Â Â Â Â Â Â Â Â Â Â Â Â  5,500.00 Fixed Costs (3,500*80%) as 20% can be avoided Â Â Â Â Â Â Â Â Â Â Â Â Â  2,800.00 Total Costs of purchasing (Fixed Costs + Purchase costs) Â Â Â Â Â Â Â Â Â Â Â Â Â  8,300.00 No feasts offer should not be accepted as cost of producing is \$8,000 and cost of purchasing is \$8,300
.

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### Feast Corporation currently makes the rolls that it uses for its sandw.docx

1. 1. Feast Corporation currently makes the rolls that it uses for its sandwiches, It uses 50,000 rolls annually. The costs to make the rolls are given below: Material= 0.04 per roll Labor = 0.03 per roll Variable overhead = 0.02 per roll Fixed overhead = 0.07 per roll A potentail supplier has offered to sell Feast the rolls for 0.11 each. If the rolls are pruchased, 20% of the fixed overheas could be avoided. If Feast accepts the offer it will be? Solution Material per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.04 Labour per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.03 Variable Overhead per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.02 Variable cost per roll Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.09 Rolls required annually Â Â Â Â Â Â Â Â Â Â 50,000.00 Total Variable Cost(50,000*.09) Â Â Â Â Â Â Â Â Â Â Â Â Â 4,500.00 Fixed Costs per unitÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.07 Total Fixed Costs(50,000*.07) Â Â Â Â Â Â Â Â Â Â Â Â Â 3,500.00 Total Costs of producing(Fixed Costs +Variable Costs) Â Â Â Â Â Â Â Â Â Â Â Â Â 8,000.00 Purchase cost per rollÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.11 Rolls required annually Â Â Â Â Â Â Â Â Â Â 50,000.00 Total Purchase cost(50,000*.11) Â Â Â Â Â Â Â Â Â Â Â Â Â 5,500.00 Fixed Costs (3,500*80%) as 20% can be avoided Â Â Â Â Â Â Â Â Â Â Â Â Â 2,800.00 Total Costs of purchasing (Fixed Costs + Purchase costs) Â Â Â Â Â Â Â Â Â Â Â Â Â 8,300.00 No feasts offer should not be accepted as cost of producing is \$8,000 and cost of purchasing is \$8,300